Prof. Sam Lehman-Wilzig – Israel’s Gas Galore – and the Future Danger of Running Out of Economic Gas
Charles Dickens’ immortal book A Tale of Two Cities starts with the famous line: “It was the best of times, it was the worst of times…”. For Israel, the Ukraine conflict could be both, depending on the continuation of that opening sentence: “…it was the age of wisdom, it was the age of foolishness.”
The issue at stake is energy. Right now the world is worried about skyrocketing oil and gas prices due to the heavy sanctions placed on Russian energy sources. But that relatively short-term problem will inevitably lead to a longer-term, (r)evolutionary outcome: massive investment and development of alternative, renewable, non-polluting sources of energy – instead of fossil fuels.
True, this has been going on for a while given the growing concern over environmental pollution and global warming. Nevertheless, the pace of such energy replacement has been far too slow to prevent catastrophic weather pretty soon down the road (that road is already in sight, judging from increasingly freakish weather around the world e.g., several days ago France hit 110F/43C temperature!).
This only partly explains the shift to alternative energy. The second – and probably more important factor – is the growing realization of most countries that they must build up their own energy (and other critical industries’) self-sufficiency. Russia’s invasion of the Ukraine came “out of the blue”; who’s to say that such an earth-shaking, geo-political event won’t happen again (Taiwan, anyone?). Thus, although this was not the death knell of globalization (still a source of many benefits), it certainly was a wake-up call: extreme reliance on global commerce can seriously weaken national interests.
Unfortunately, many countries are not rich in fossil fuels, but most do have access to natural energy sources: wind, hydropower, solar, and geothermal. Add to this increasingly efficient electricity storage technologies (nearby countries can serve contiguous states), and the world could be regionally, relatively energy self-sufficient by the second half of the century.
This is where Israel faces its dilemma. On the one hand, after decades of searching for large energy resources, major (Mediterranean) gas finds were discovered and are now being exploited. This is very helpful in the short-to-medium term – not only for domestic use but also for sale and increased national income (Israel has set up a Sovereign Fund, similar to Norway and other energy producing countries). However, there’s an “on the other hand” here: the more Israel invests in gas exploration and exploitation, the less the country devotes to alternative energy, feeling that it doesn’t need to, given its large (and continually growing) reserves.
This is precisely where Dickens’ “foolishness” and “wisdom” clash. Politicians tend to focus on the immediate future (their electoral prospects), and far less on long-term developments. By emphasizing the fruits of gas exploitation, Israel would be doing itself double harm. First, by polluting its own coast and adding to global warming (natural gas pollutes less than oil, but still pollutes significantly) – not something that a hot country like Israel can afford. Second and nationally far worse, losing the R & D race to other countries in developing efficient and profitable alternative energy technology.
Israel’s natural gas will eventually run out. Indeed, the recently signed agreement with Egypt and the European Union to ship Israeli gas to Egypt where it gets liquefied and then sent on to Europe, will only accelerate these trends: mid-term benefits and long-term damage. A foolish policy would rely exclusively on this local energy source until it runs out. Wisdom demands that the country’s leaders look not only at its small bailiwick but rather at what’s happening in the world at large. The Russia-Ukraine conflict will have repercussion far beyond geo-political and military power. Israel’s leaders would do well to internalize this as soon as possible so that the country can continue to have “the best of times” and not run out of gas – speaking metaphorically and economically.
